Price Hikes In Midwest Pace Nation

WASHINGTON — Riding on the backs of home buyers who traded up this winter, the average price of both new and existing houses nationwide leaped 11.4 percent in the first quarter, to $140,200.

The increase, from $125,800, is the largest year-to-year change since the fourth quarter of 1985 and is mostly the result of move-up buyers rushing to avoid higher mortgage rates.

This was particularly true in the Midwest, where the largest price increases tabulated by the Federal Home Loan Bank Board were registered in the most recent 12-month period.

In Milwaukee, the average price of houses sold in January, February and March was $121,100, a 37.5 percent leap from $88,100 in the same three-month period last year.

Columbus, Ohio, recorded a 32.4 percent jump, from $102,800 to $136,100;

Chicago logged a 32.2 percent boost, from $108,400 to $143,300, and Cleveland showed a 24.2 percent increase, from $85,500 to $106,200.

Prices rose ``only`` 11.6 percent, or just slightly above the national average, in Minneapolis-St. Paul. But the increase was enough to catapult the Twin Cities into the No. 1 spot as the nation`s most expensive housing market. The average price of houses purchased in the first quarter in Minneapolis-St. Paul was $215,700. A year ago it was $193,200.

The bank board`s latest quarterly survey of 32 major markets also found that prices dropped in only eight cities: Boston, Detroit, Houston, Louisville, Miami, Rochester, N.Y., St. Louis and Washington.

This is another indication that home buyers shopped earlier than normal this year to lock in lower borrowing costs. Interest rates have been rising for several months now and are not expected to peak until some time this summer.

The most significant declines were recorded in Rochester, off 26.4 percent, from $119,200 to $87,700, and Miami, down 15.1 percent, from $112,000 to $95,100.

Louisville, where the average price paid in the first quarter price fell 1.5 percent, from $80,900 to $79,700, is now the least expensive housing market in the country and the only major city in which the average price of housing is below $80,000.

The average is between $80,000 and $90,000 in only one other market, Rochester, and between $90,000 and $100,000 in just seven more. In the other 23 markets it is above $100,000.

Trailing Minneapolis in second place on the top-10 list is San Francisco, a perennially expensive market where the average price is now $208,300, up 10.8 percent from $188,000.

Los Angeles is in third place at $193,400, up 7.7 percent from $179,600, followed by New York at $191,100, up 4.6 percent from $182,700, and the nation`s capital, Washington, where, despite a 3.5 drop from $200,300, the average price is still a hefty $193,300.

The second tier is led by San Diego at $185,300, up 25.4 percent from $147,800, followed by Honolulu at $184,400, virtually unchanged from $184,700 a year ago; Boston at $171,200, off 10.8 percent from $192,000; Atlanta at $156,800, up 11.8 percent from $140,200, and Baltimore at $156,200, up 16.1 percent from $134,500.

New homes were larger and chock-full of more goodies than ever before last year, so it is no wonder that housing prices keep surging. According to the Census Bureau, the average size of a new home in 1988 was 1,995 square feet, or 440 feet larger than 10 years ago.

In addition, more new houses had central air conditioning, two or more baths and four or more bedrooms than in previous years.

Coincidently, the National Association of Realtors also reports that while the three-bedroom may be king, the proportion of resale houses with four or more bedrooms is on the upswing. The number of bedrooms is considered a barometer of house size and trends.

According to analyst Glenn Crellin, houses with at least four bedrooms accounted for a 28.7 percent share of existing home sales last year, up from 22.4 percent in 1968.

Three-bedroom homes still dominate with a 53.8 percent market share, but that is a decline from a 56.5 share 20 years ago. Dwellings with just two bedrooms also declined, from 20 percent in 1968 to 17.5 percent last year.